SMM Manganese Ore Weekly Price Review and Forecast (15-19 Jul. 2013)

SHANGHAI, Jul. 15 (SMM) –

Review:
Manganese ore prices at ports weakened further last week, though trading volumes edged up. Manganese ore traders are pessimistic over future prices since operating rates at downstream producers remain low even after power tariffs in Southwest China have been cut. Most opted to keep low stocks at hand against falling prices. Port inventories remain high, putting downward pressure on manganese ore prices. 

Prices:
In the Port of Tianjin, the mainstream traded price for Australian manganese ore (Mn48%, lump) was RMB 43.5-44/mtu; RMB 35-35.5/mtu for South African mixed carbonate manganese ore (Mn38%, lump), and RMB 38/mtu for South African high-iron manganese ore (Mn35-36%, Fe18%). In southern ports, the mainstream quotations for Australian manganese ore (Mn48%, lump) were RMB 43/mtu. Mainstream traded prices were RMB 38-38.5/mtu for South African high-iron manganese ore (Mn35-36%, Fe20%); RMB 35-35.5/mtu for South African mixed carbonate manganese ore (Mn38%, lump), and RMB 40.5/mtu for Australian high-silicon manganese ore (Mn36%, Si20%).

Inventories:
Inventories at ports were 2.36 million mt last week, with 1.3 million mt in the Port of Tianjin, up 50,000 mt on a weekly basis, and 900,000 mt in the Port of Qinzhou, also an increase of 50,000 mt from the previous week. SMM believes port inventories will begin to drop as operating rates at alloy producers in South China will increase gradually.

Steel Market:
Wuhan Iron & Steel hiked ex-works prices of select steel product classes for August by RMB 50-180/mt. This boosted market confidence over steel prices, though summer is an off-season for steel industry. However, Baosteel’s carbon steel plate prices for August remained unchanged and Hebei Iron & Steel’s construction steel prices for mid-July also held stable. SMM understands that the recent rise in steel prices will not be sustainable given the weak demand.   

Forecast:
A RMB 0-0.5/mtu decline is expected in manganese ore prices at ports in the coming week.